Greenstone Resources Accuses Lenders of Cutting Off Funding
Greenstone Resources Accuses Lenders of Cutting Off Funding
New York, Sept. 1 (Bloomberg) -- Greenstone Resources Ltd., a troubled Canadian gold miner, sued Panama's Banco Latinoamericano de Exportaciones and two other lenders for $25 million, claiming they illegally cut off the company's financing and seized its funds.
The lawsuit filed yesterday named Gerald Metals Inc., the administrative agent, Bladex, and First Union Corp.'s Hamilton Bank NA. Greenstone said that, without warning in July, the lenders forced the company to stop operating by cutting off an $18.7 million credit line and seizing about $2.8 million -- all Greenstone's available cash. The lenders also tried to seize $225,000 of the company's gold, the suit said.
The lenders took this action ``to place Greenstone in a state of severe economic duress to coerce Greenstone to repay the loans in full or be forced out of business,' the lawsuit said.
Toronto-based Greenstone, which mines gold in Central America, has been unable to meet its financial obligations amid low gold prices. It owes money on an $18.7 million line of credit and US$5.64 million and C$104 million of bonds. The company said yesterday in a press release that it's in talks to resolve its debt problems.
Gerald Metals declined to comment on the suit. Officials at Hamilton Bank and Bladex weren't immediately available for comment.
The suit seeks unspecified compensatory damages and at least $25 million in punitive damages. |
